1. Which businesses can apply for IGIC refunds in the Canary Islands?

Generally, a business will be entitled to claim a IGIC refund in the Canary Islands if it is not registered for IGIC in the Canary Islands (and thus does not have a Canary Islands IGIC number) and does not make taxable supplies that would be subject to IGIC in the Canary Islands. The business would also need to be established in a country that has established reciprocity with the Canary Islands in relation to VAT/IGIC refunds.

2. What are the different IGIC rates applicable in the Canary Islands?

In addition to the standard Canary Islands IGIC rate, there is also a reduced Canary Islands IGIC rate of 3% and an increased Canary Island IGIC rate of 15%. The following expense types that are generally claimable are subject to the reduced Canary Islands IGIC rate: certain food, drink and restaurant services. The following expense types that are generally claimable are subject to the increased Canary Islands IGIC rate: vehicle expenses, hiring of means of transport, certain food, drink and restaurant services and certain expenses related to admission to fairs and exhibitions.

3. Are there special considerations for IGIC refunds in the Canary Islands?

Although the Canary Islands are part of the EU, being an autonomous region of Spain, it does not form part of the EU territory for VAT purposes. Even though the Canary Islands are therefore not bound by the EU VAT Directives, they do operate refund mechanisms similar to the EU 8th and 13th Directives.

4. Are there specific documents that need to be submitted as part of IGIC refund applications in the Canary Islands?

The following documents are required to be submitted as part of a IGIC refund claim similar to an EU 8th Directive claim: invoices for which the IGIC refund is requested and documents relating to the entity’s appointed agent (if applicable – for example if the business appointed VAT IT to submit the VAT refund application on its behalf). The documents required to be included in a IGIC refund claim similar to an EU 13th Directive claim are: invoices for which the IGIC refund is requested, a valid tax certificate and documents relating to the entity’s appointed agent (if applicable).

5. Which goods or services are exempt from VAT refunds in the Canary Islands?

Generally the IGIC on entertainment is not claimable as part of a IGIC refund in the Canary Islands. The IGIC on the following expenses are therefore generally claimable: Fuel; Hiring of means of transport; Vehicle expenses; Taxi fares; Accommodation; Food, drink and restaurant services; Admission to fairs and exhibitions and other general expenses (such as professional fees).

6. How are IGIC refund applications submitted in the Canary Islands?

IGIC refund applications in the Canary Islands similar to both the EU 8th and 13th Directives are submitted through an online portal managed by the Canary Islands tax office.